The ANO won 78 out of 200 seats in last October's general election, but Babis, who has been charged with EU subsidy fraud, has failed to woo coalition partners.
![Kush addicts are digging up graves and desecrating corpses (image used for illustrative purpose) [BI]](data:image/svg+xml;charset=utf8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20width%3D'100'%20height%3D'100'%20data-ring-placeholder%3D'1'%3E%3C%2Fsvg%3E "Kush addicts are digging up graves and desecrating corpses (image used for illustrative purpose) [BI]")
His efforts took another blow on Friday, when the leftwing Social Democrats (CSSD) walked out of talks after several weeks, saying they could not join a government that includes Babis, given his legal troubles.
The Slovak-born chemical, food and media tycoon is facing criminal charges over alleged 2007 EU subsidy fraud to the tune of two million euros ($2.5 million) linked to his sprawling Agrofert holding company.
He has flatly denied any wrongdoing and insists the case is politically motivated.
"The talks failed because of ANO's unwillingness to tackle the problem with a prosecuted prime minister," CSSD chairman Jan Hamacek tweeted.
Babis told reporters the talks broke down because the CSSD had demanded to fill the post of interior minister -- supervising the police -- which ANO refused to give up.
CSSD deputy head Jiri Zimola told reporters on Friday that "the party leadership has ended talks with ANO about a potential coalition".
"Unfortunately all our proposals went unfulfilled. It is Mr Babis's turn now to come up with a solution," he said.
"ANO last night rejected a stable government that would work for this country and its people."
Chance of early election
Earlier this year, Babis cobbled together a minority government of ANO members and experts with no party affiliation, but it failed to win a parliamentary confidence vote in January and resigned.
President Milos Zeman, an ally of Babis, asked the second-wealthiest Czech to try again, giving him until June to form a majority cabinet.
Zeman, a pro-Russian, pro-Chinese and anti-Muslim veteran leftwinger, who was elected to a second five-year term in January, has two attempts to name a prime minister under the constitution.
Since Zeman has now merely asked Babis to form a new cabinet and has not officially appointed him prime minister, the president could still tap someone else to assemble a government.
If necessary, a third and final try to form a government falls to the parliament speaker, who is currently an ANO member.
A Zeman spokesman said on Friday that the president would meet Babis before making his next move public, but declined to specify when the two would meet.
"Early elections are the most likely scenario now," independent political analyst Jiri Pehe told AFP, adding that Babis may want to hold the vote in autumn, alongside the Senate municipal elections.
ANO would be expected to win a snap vote, with a March poll by the Czech Academy of Sciences showing it with 30.5-percent support, well ahead of the competition.
But adding to Babis's woes, three investigative journalists have claimed police used intimidation to discourage them from working on stories about the mogul by repeatedly calling them in for questioning.
In last October's election, Babis had won voters upset with traditional parties over their failure to tackle corruption in the Czech Republic, an EU member of 10.6 million people with a thriving economy heavily dependent on car production and exports to the eurozone.
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